Wall Street, “High Time” to Monetize Marijuana

At the Investor Pitch Forum this week in Brooklyn, NY, hosted by the cannabis industry investment and research firm The Arcview Group, 200 investors described as HNW (high net worth) met with dozens of companies looking to come into the new market of legal recreational marijuana.

Cultivating Spirits, a caterer that pairs Organic dishes with fine wines and just the right marijuana, got the attention of more than 12 investors.

Mule Extracts, a cannabis-oil extraction company, also generated some buzz, as CEO Rachel E. Kurtz made it through a Shark Tank-style present hopeful of finding an investor at the forum.

It looks to some a good time to be investing in the space, at least in terms of market expansion.

Recreational weed is legal in Colorado, Alaska, Oregon, Washington, and Washington DC, and it is on the ballot in nine states in November.

If California legalizes it, the industry could 3X in size, to $18-B. Analysts expect it to grow to $50-B by Y 2026.

Investors at the forum discussed the legalization efforts, which will have a big impact on their returns. Arcview CEO Troy Dayton stressed the importance of lobbying efforts in Key states, including California, and expressed frustration with the Drug Enforcement Administration (DEA), which has maintained marijuana as a Schedule 1 drug.

There is a divide between the cannabis movement as inspired by principle and as driven by commerce. It does not make business sense for entrepreneurs and investors to push too hard for federal legalization. As it is, the fledgling industry enjoys protection against the giants of tobacco, pharma, and alcohol.

Although a recent poll found that most Americans support legalizing marijuana, it remains to be seen how many will dabble in recreational use.

A review of about 40,000 legal marijuana purchases made in Washington State from September 2014 to July 2016 found that the average consumer spent $647 annually on the pleasure/vice.

The yearly expenditure on tobacco smoking is $2,555 and $1,560 for alcohol, according to the data.

And fast-growing industries are prone to shakeouts.

Investor-members of Arcview, which was founded in Y 2010, have put $83-M into 130 companies in the cannabis industry, drawing from more than 500 investors. A few may flourish and provide big return, others will be disappointed.

Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.